What They’re Watching: Monisha Machado-Pereira

Monisha Machado-Pereira, partner at McKinsey & Company, joins us for this edition of “What They’re Watching” to discuss three imperatives that she believes will help improve health care sustainability.

What we’re watching is ways to improve the sustainability of the health care system and improve the value that it delivers, and doing all of this in an environment of regulatory uncertainty and market disruption which is constant. Our analysis has lead us to three imperatives that we believe will be able to help with this sustainability. The first being massive productivity and improvements in the way services are delivered in healthcare. That can be through the adoption of low cost innovation and sometimes completely remodeling or redesigning your business model. And this is true even for high, fixed asset companies like payers and providers that play in this space.

The second is creating high functioning, high performing markets. This can be done through aligning of incentives across the value chain as well as identifying which stake holder is best suited to bear what kinds of risk. There’s catastrophic risk, that should be insurance risk, or elective surgeries, that should be patient risk.

And then the third is patient and population health management. And that, as you know, is a combination of removing the silos, whole person care, payment innovation, and expanding the definition of what a provider is. And we think, as impossible as this sounds and as painful as it is definitely going to be, it really does warrant tackling because our conservative estimates are that if there’s widespread adoption of best practice across even the first two imperatives, you’re looking at reducing national health expenditure by $300-500 billion a year. And reducing the growth of those expenditures by 30 percent. So it’s certainly a worthwhile endeavor.